we have a lot of respect for what he's done. >> pleasure having you here today. >> thank you. a pleasure to be with you. i especially appreciate that training session. >> good point. >> i didn't know how to handle that. i'm going to go from here to the closest pub and see if i can -- good morning and welcome to "squawk on the street." i'm david faber with jim cramer and kelly evens from the new york stock exchange. carl quintanilla, melissa lee and simon hobbs also all off. not sure what message they're all sending me. dow looking to extend its winning streak to eight. that's one day after the s&p 500 closed above 1,400 for the first time in more than four years. you see it there. fair value or the implied open at least looks like we will open a bit higher on all the major averages. futures as you see on the rise despite that february consumer price number jumping by the most in ten months. of course, inflation worries impacting the bond market.

as for europe, let's take a look at those markets. you'll see there that we are up across the board on all of the big european marks. always like to take a look at spanish and italian yields. if we did, you'll see they're really not doing much of anything. kind of flat today. spanish 10-year above 5%. italy, of course, importantly below 5%. >> here's our road map for the morning. what's going to drive the buzz and trading today. number one, got your ipad yet? apple's newest version of the tablet out today as the stock flirts with new highs. treasury secretary geithner says, quote, the economy is exhibiting encouraging signs of early expansion but still faces challenges. he said that in a speech last night. we're going to talk about that. three, lacquer keeps dissent. the fed governor sees a rate hike as likely in 2013. that's not exactly consensus on the fomc. finally, how about those bank of america shares? up 66% this year. nearing a $100 billion market

cap. can it keep up the momo? notice there was no music at the top of the show. what happened, guys? apple's much anticipated ipad being released at stores in the u.s. nine other countries today. it has, in fact, been on sale for an hour on the east coast. going on sale this hour in the central time zone. bottom line, wherever you live in the u.s. sales begin at 8:00 a.m. local time. apple sold more than 15 million ipads in the fourth quarter of 2011. that was the ipad 3, i believe. >> 2. >> this is just ipad. >> look, i had a problem last night. >> third generation, if you will. >> they went to just the ipad name which i'm still kind of curious about. >> one of the things they're doing is to try to be as unpredictable as possible. now, last night i had a critical break down with siri, my girlfriend in my iphone 4s. i said i'm having problems playing scramble with friends. not words with friends. we like scramble more.

she said -- basically she dissed me entirely. i'm thinking i've got to figure this game out. i'm going to the apple store tomorrow. boom. i remembered this. i don't think you'll be able to get in there. >> there's no way. >> siri could have reminded me. find me an apple store that doesn't have a line around the block. i don't think there'll be one. >> i don't know that siri can answer that question, either. >> she lives to serve, my friend. >> that's what i hear. what about the stock itself. we saw it hit close to 600 yesterday. talking about a $550 billion market value. see some people outside those apple stores we just referred to. we had this conversation yesterday, jim. is ill par bollic? is it not? we talked so much. is it justified? the entire market cap now apparently equals all of retail added up. that includes walmart which i find hard to believe. >> not just the retail index. also bigger than the utilities intex, bigger than materials. it's a huge stock. >> and has had an incredible impact on the marketplace. perhaps not quite as much as ibm back when it was number one. >> microsoft in 1999 when it peaked, its market cap was still

over that $600 billion market. i don't think apple's is there just yet. >> it's not. as a percentage of the overall market given we hit highs there, i don't know microsoft had as much impact. >> one more interesting factoid, it's taken about a month for apple to go from the $500 to $600 mark. about the same time it took for the nasdaq to go from 3,000 to 4,000 mark in 2000. not that they're the same thing. there are clearly different things going on. goes to show you the speed of the assent. >> this is not the new jersey turnpike. there are no state troopers. price targets keep being overrun. this morning ubs raises price targets to 675 from 550. opco from 550 to 700. >> piper jaffray, too. >> yes. you get this constant chatter. it does seem like an amen chorus. at the same time, look, if you're using 550 and the stock isn't in your level what are you going to do? are you going to ignore it? you've got to come out over the

top. >> the price target are going up for the right reason. they underestimated the sales potential, underestimated the earnings potential, at least it's built on something. >> almost feels as though the analysts are just soupsuperfluo >> we were discussing the notion of how much do these pixels really matter. a lot of this depends on what do you use your ipad for? >> just the people that were talking about this new ipad apparently has four times as many pixels as the old one. walt moss in the "journal" had a great write f up. >> for the most part my kids use it for games at this point. >> you're a mets fan. no reason to watch mlb.com. >> the season is yet to start. lucas duda is going 3,100.

>> is that what it's going to be? >> spring training is our time as mets fans. come on. >> the nets. the knicks. it's all falling apart. >> what is it about the pixels, though? i'm curious where you were going with that. >> we were talking baseball. >> because mlb.com and nba -- right now, right now cbs sports, i mean, look. i can do this story which says $17 trillion worth of work is going to be lost because of the ncaas. you clearly played because you're about seven feet taller than i am. one of the things i want to tell you about you need that resolution to make it so it's your tv. >> you mean the pixels are the biggest draw. >> yeah. i think it's very, very big. one of the things we always seem to discover about apple is we find things we didn't need and it turns out we needed them. i think when you see that resolution you'll say what was i doing? remember when your tv switched to hd? >> isn't it kind of sickening? the products are all so amazing. you look back at the old models. how did we ever live without

this pixelated ipad. >> the fact remains as well, part of the game plan is they really only have a handful of products. you think about this company, you're not talking about much. you're talking about a phone. a tablet. an ipod. >> it's entertainment, computing power. >> it's incredible. oh, yeah, they make computers, too. >> i think they're the most forward looking technology enterprise operation. they're really gravitating toward all apple products. >> numbers unheard of just a couple of years ago for anyone to be using an iphone as their business device. now everyone has them. >> as it moves into the enterprise. i saw it every day. ceos would come and join us onset. many would bring the ipad. is that allowed in the company? not yet in my company. i use it personally. that was a good sign. >> it's a generational thing. our kids don't know hewlett-packard, dell, my apologies to hewlett-packard. and i like michael dell very much. but they don't know them. they think that apple is computer.

this is a phenomena that steve jobs tabbed into. remember, one of the things he really -- the initiative of having textbooks be on your ipad. that's early indoctrination to people recognizing that you shouldn't even carry textbooks in your backpack. >> it's funny to go back and think about that ipad debut whenever it was in january just a couple of years ago and how the initial reaction was this is it? there was all this build up np is it? come on. look how quickly it's changed and up ended the entire computer world. >> i have a feeling we're going to mention apple a couple times in the next three hours. we'll see. treasury secretary tim geithner meanwhile says the u.s. economy is growing again. he cautions it faces tough challenges that call for action to create jobs and foster expansion. geithner spoke to the economic club of new york last night. he singled out rising oil prices as a stumbling block. geithner also arguing the economy now more productive than it was before the financial crisis but warns confidence remains fragile. i have to say, i keep hearing it surprisingly, i had another off the record meeting.

typically they are more productive than are when we bring somebody on tv. love to have them. with the ceo of fortune, let's say, fortune 50 company. multinational. plugged in to household formation, number of other things. not as positive as i would have anticipated. >> the tone of business? >> yes. on tone of business. same kind of thing i keep hearing, jim. it's okay. come on. getting better? getting a little better but not great. >> beewe're going to talk to spt air in a little bit. airlines are cautious. they've talked about consumer demand hanging in there. with ticket prices on the rise not exactly a sign of strength. >> how do we jive that with whole foods price targets being increased this morning. coach price targets increase third-degree morning. >> who are those customers? people benefits from the increase in equity prices from better job market prospects. not something necessarily extending across the entire population. >> this is the 1% spending. >> i continue to sense there is, perhaps, a lack of confidence. not as much as you might anticipate given the run-up in

the equity markets, given what we've seen in the bond market in terms of augering for potential inflation mons the leaders of our corporations who are going to make those decisions in termsover spending money. >> remember, the impact from oil, higher gas prices. we're almost desensitized to it because it's been in the headlines so much. people who have to go out and fill up when it's costing them almost $100 just to fill up those tanks, it makes a big difference. >> gas prices did come down a bit this week i believe. >> california. >> we haven't seen the impact on retail. we talked about it time and again. >> one of the things i would point out once again, i don't mean to be political about this. my colleague larry kudlow last night, he had harold ham on, the energy person for romney. if you were to be aggressive in natural gas, you really could lower the price. it's a theme. this morning fred page of the journal where you used to work, again, natural gas. talking about this as a fuel that can bust opec, change -- >> look at the cpi data we got out not 45 minutes ago.

some of the core prices in that index were a little bit softer. the question remains how much can companies ultimately pass on. again, we'll talk about this in a little bit. it's not clear -- >> geithner seems to know. the other thing geithner i think did refer to is rates are going up, but at the end of this year, of course, the expiration of bush tax cuts. you've got real questions about a budget and where we're going to be in terms of deficit reduction and the like and forced cuts so what that is going to do. not the mention the election, which does figure into some of the caution i'm at least hearing from some of our business leaders. >> i come back. i want to get back into this august/september way back machine, u.s. debt downgraded. we thought for sure rates were going to spike. of course they went the other way. you mentioned italian and spanish rates. here we're talking about 5%. i remember when i used to swing around millions in the bond mark market. i dreamed about the day the u.s. could a 5% 10-year because we were so much higher. i want to push back on

positives. you and i will have a spirited debate at times. i don't want to miss the bigger picture. the s&p 1 up a huge amount. the dow is up huge. we can say it's all false. there are a lot of earnings backing up the move. >> let's bring in on one fed president lacquer had to say. says he dissented against the central bank's decision this week because he thinks rates will need to rise some time this year. they posted on the richmond website the economy is expanding at a moderate space and inflation is close to the committee's 2% objective. the only vote against the fomc decision. take a look at jeffrey lacker. >> it used to be you'd hear from these guys kind of a murmured cryptic thing every time in a while in the greenspan regime. now they know they have free re

reign to come out and explain positions. now he's posting a statement explaining his decision. it goes to show how much times have changed. >> kelly, is that a good or bad thing that we don't have one source speaking? honestly, don't you think it's harder to plan if you're a business person, oh, this guy lacker, suddenly i have to worry about what he has to say. i've got to worry about another fed guy from texas. >> i don't know. >> doesn't this cause more confusion and make it not so great for business. >> i do think there's a sense at which whether it's businessmen or the public, generally the idea was people would have more confidence in the fed in they understood its workings. it even reminlds me of the sterilized qe discussions where they're trying to almost make overtures to people to help people who might not fully understand what they're doing not be worried about inflation. gets a little circular. >> yeah. you know too much. >> i don't want the man behind the curtain. i don't want to hear a guy in the locker room. as soon as i hear there's a guy in the locker room that says he disagrees with the coach, i know that team's going down. by the way, do you think there's a lot of good feeling in that knicks locker room?

>> i think it's fwragreat. i think it's kumbaya, baby. i remember when woodson was the star of indiana. remember that? >> yes. i look at the cacophony. it makes it more difficult i think. i don't really want to know there's discordant voices. i want to know we've got a fed chief. while everybody has a right to argue in the room -- >> you have to hand it to ben bernanke. regardless of what the more hawkish members of the fed come out and say, he's the one making the call. >> he's from princeton. they had those debating clubs -- the dinner clubs we weren't allowed to join. what i find is, is that he does have a debating style. but in the end there is a conclusion. >> we're going to head down to rick santelli momentarily. about 30 seconds or so. real quickly on b of a -- >> about to get the industrial production figures. >> that stock up sharply. 66%. do you think it has more to run? we're going to get to rick santelli. >> i thought they would fail. i thought they would fail the stress test and city would pay us the stress test.

completely wrong in that we're still living with the shock that bank of america passed which is, by the way, a little incredible given countrywide. >> it is. back to $100 billion market value. 99.1. we'll see if it passes $100 billion. breaking news. rick santelli in chicago. >> february industrial production unchanged. zero. goose egg on the month from january to february. this disappoints a bit. we were expecting .4. here's where it gets a little complicated. last month originally at zero. revised up .4. i guess you average the two together you get where you want to go. but i'm a rate of change guy. i think where you've been most recently versus today is more important. if you look at the past utilization, this indeed is good news. last month revised to 78.8. why is that important?

last month's revision out 78.8 is the highest level in close to four years since the summer of '08. so utilization rates stay on the high side. back to you. >> want to quickly point out on that, one happy birthday to rick santelli's father. 82. that's what matters. we want to keep that perspective. rick, that's great news. the second thing is the federal reserve has always looked at these numbers -- one of the reasons they have is that 1933 in this country, from 1929 to 1933 we dropped down to 25% utilization. and that was really what we remember in the great depression as being the single most horrible thing that happened. i come back and say i still think that maybe the economy peaked a little bit of peak. i don't want to see that number. i want to see that go to 79, 80, and i wanted to see .5 on the production. it may jive with what you were saying about what they're saying in private. >> yeah. all right. rick, want to go back to you. >> jim, listen. i didn't hear you. i was looking at the numbers. but thank you for wishing lou

santelli happy 82nd. i'm telling you, all's he does all day long is watch cnbc. he wishes you a happy seventh anniversary because he looked at all the tapes the day i was out there. >> that's terrific. look, we got to keep perspective, rick. that's what matters. a lot of our parents, my dad, too, watches throughout the day. i think it's a great thing. can't lose sight of the fact that we have the best audience in the world including your dad. >> there you go. a nice place to take a break. coming up, exclusive with spir spirit airlines ceo. also, boston beer founder jim koch. also, more "squawk on the street" comes up live from post nine at the nyse. companies like to get between ttd#: 1-800-345-2550 you and your money. ttd#: 1-800-345-2550 at charles schwab, we believe your money should be available ttd#: 1-800-345-2550 to you whenever and wherever you want.

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there's an irish band i know. revelers ready to raise their glasses and celebrate st. patrick's day this weekend. meanwhile, apple looking to make lots of green as the new ipad goes on sale in stores today. that brings us to this morning's squawk on the tweet. if apple created a beer, what would the company call it and what would make it special? tweet us at cnbcsquawkst.

we'll air your responses throughout the morning. >> only if they're clever enough. this is going to be a tough one. i want to see people bring their game. >> i'm always impressed by the creativity of our viewers. >> they will deliver. i'm stumped. i'm going through icash. that's st. patrick. ishamrock. that doesn't work. i defer to my betters here. although i do candidly like pabst blue ribbon. i'm a pbr guy. >> you really are? >> yes. >> i was a natty light person myself. >> pennsylvania. rolling rock. yuengling. >> rolling rock, they've taken it off -- latrobe. it's got st. louis on it. the beer industry as we're going to see has been shaken up dramatically. up next, making sure your portfolio is wearing the green. >> i'm the only one with green! >> mad dash. as we head to break, let's take a look at futures.

♪ when your chain of supply goes from here to shanghai, that's logistics. ♪ ♪ chips from here, boards from there track it all through the air, that's logistics. ♪ ♪ clearing customs like that hurry up no time flat that's logistics. ♪ ♪ all new technology ups brings to me, that's logistics. ♪

without the stuff that we make here, you wouldn't be able to walk in your house and flip on your lights. [ brad ] at ge we build turbines that power the world. they go into power plants which take some form of energy, harness it, and turn it into more efficient electricity. [ ron ] when i was a kid i wanted to work with my hands, that was my thing. i really enjoy building turbines. it's nice to know that what you're building is gonna do something for the world. when people think of ge, they typically don't think about beer. a lot of people may not realize that the power needed to keep their budweiser cold and even to make their beer comes from turbines made right here. wait, so you guys make the beer? no, we make the power that makes the beer. so without you there'd be no bud? that's right. well, we like you. [ laughter ] ♪

♪ all right. a few minutes before the bell. time for cramer's mad dash. i'm adding a little dash. >> this is dash. owned by b & g foods. they're turning it around. >> are they? i mentioned to you before the break jaffrays. it's a company i was following closely when shawn egan came after this investment bank. >> you warned people not to bet

against these guys. >> this is this week. go back four months. this thing is a $10 stock. >> right. >> here we are. they're going to report earnings next week, by the way. >> is that richard handler being forthcoming, telling you everything and doing a great job? >> handler did a great job fighting back. instilling confidence when it seemed to be disappearing very quickly. let's not forget about the bonds, right? 75 cents on the dollar. now trading at par again. >> people were worried they were involved with mf global. he put that to bed. >> about sovereign exposure. he came out. you want everything? >> isn't that great. people worried they did that deal with mf. >> that's right. >> i have to point out that i met richard handler when he was probably 9 or 10. because allen handler, his dad, is my accountant. he used to have a cot and his boy was right there next to him. i was always impressed this guy knew more about the tax code than his father. >> here we go. there's the move. >> look at that. you know, this is where

pessimism costs you money. right? >> yeah. >> that's a great move. definitely worth pointing out. >> almost a double there. >> ge has had a move over the last few days. >> we'll here from research director of action alerts at 10:00. i think when you read these stories about the shift from coal to natural gas you should be thinking ge's got a hammer lock in that business. when you read the stories about boeing, which is another great company, getting big orders, think about general electric. ge has more momentum than i have seen at any time since jeffrey immel took over. >> we got the opening bell coming up next.

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board back there. >> there it is. >> all right. here at the big board, by the way, ringing the bell, software company. >> finishes lower, 23 and change. why? because individual retail investors -- finished 23, 24 -- come in because they didn't get demand where -- they come in like suckers and pay the top. allison was the better deal yesterday. that was the one. >> real quickly, kelly services at the nasdaq. >> appreciate that one. >> by the way, again, very appropriate on this day before st. patrick's day. >> the name kelly is irish for grandson. viewers can correct me on that one. >> very confused. that's okay.

>> you had a good call there yesterday. early on. you were focused on the mobile to sales. mobile to -- >> my bad. i own that. it opened at ten times sales. i felt the group, the guy wire jive software, were five to seven times sales. already very high. not a big company. this is cloud software. i just want to caution people that sometimes the tortoise does win the race. this is asop's stock guide. the slower one's allison. they had a good story to tell. >> they did have a good story to tell. it wasn't your classic deleveraging story is as so often the case when you've got a upon sor-l sponsor-led ipo. they were selling. when we talked to the ceo it was apparent they've -- those

multiples which is what we really watch because it's all about your ability to pay down debt go down. then there's growth. there's still growth for allison. although, of course, there's a lot of growth in cloud, too. >> you know what's interesting is that wawco, a ferm today said good things about wabco. it's allison versus wabco. i start thinking maybe the whole trucking industry is on fire. which is something a fella here said -- dewey? >> yeah. dewey. >> he was saying we're in the fifth inning of the trucking cycle. cummins, yesterday, 52-week high. very much of a chinese play. if china's really slowing, i wouldn't be thinking ge would be breaking out, cummings breaking out. >> you saw the big move in transports yesterday at the same time people are worried about coal demand. now, that's more for rail. people are getting cautious about transfort. we saw analyst notes on this yesterday. at the same time you saw the transports index search. what's the mixed message?

>> i will come back on that. i do want to point out yesterday norfolk southern, csx, union pacific all at the rail conference saying very positive things, that they can offset coal with higher rates away. automobiles very important. i think a lot of people were making a bet -- there was a short bet against the rails yesterday. it backfired. union pacific up gigantically yesterday. norfolk southern up. it's a mixed message. you need that coal as being a driver. >> if the fundamental driver is a story that's breaking down, that's what makes me a little nervous. that's what makes that barclays analyst a little nervous, too. >> we did not get to suez max rates. 35,000. why is that important? why do i care about it? >> great question. okay. one of the terrific guys in the shipping industry is herb yes or no -- yornhansen.

i've been calls it natty dread pipt had been such a terrible stock. the yield, def dind, he keeps paying at distribution. we'll go back to calling it nat. the best way to be able to hoard oil was to take a tanker and fill it. because the day rates were so, so low. day rates higher may raise the stakes of hoarding. maybe that could be a reason why oil might peak, although obviously geopolitical tension being rach epted up as the sanctions come into play. notice the chinese back door saying, listen, we're not going to -- don't worry. sanctions aren't going to hurt us. a lot of moving parts in the oil industry. it's difficult to try to figure out -- you always hear speculators are involved. then you hear strategic pe troil y yum reserves may be unleashed. it was set up for geopolitical tension. are they really going to tap it? >> you can argue we have

geopolitical tension right now. no one actually thinks it's going to be a swing factor. even if you would make the ex a extraordinary move of releasing of the reserves, it gets you a little lower on the oil prices for a little bit of time. >> bank of america shares up another 2.3%. brian moynahan has got to be breathing a bit of a sigh of relief. jpmorgan back to $170 billion. >> 1 for 2 is not as good as 2 for 2. the underweighting at the beginning of the year was extraordinary. >> people hated bank stocks. >> let's get over to bob pisani. get more on what's moving today. a smiling brian moynihah. >> he should be smiling. of course, he passed that stress test. everybody was amazed at that fact. we're amazed at the volume here today, guys. quadruple witching. the quarterly expiration of

stock and index futures and stock and index options. the important thing is we've done almost half a billion shares down at the new york stock exchange already. on a normal day we might do 800 million, 900 million would be a good day. titanic volume here. s&ps settle on the open. that's why you get the big volume. that may have been partially responsible for the big move up we've seen this week. have you noticed, guys, and kelly, have you noticed, look at the dollar. dollar goes up parts of this month. stocks go up. dollar has been a little weaker the past few days. stocks go up. bond yields have been flat all this month. stocks go up. suddenly this week bond yields start going up, stocks keep going up. is there a pattern here? the market is going up regardless of what's going on around it. that has changed completely. the market's been subject to the slavery of the bond market and what's been going on in the dollar market for a long time. global markets are rising on improved global prospects, particularly in the united states. and on less fear out there. a decline in risk associated

with owning stocks. that's good news. again this week, the s&p is up 2%, 2.3%. germany is strong. japan is up 2%. france is at eight-month highs. china is the only outlieier. the chinese stock market has been an under performer for a long, long time. you can't deny the overall stock market is going up. here's the question. jim, i know you watch the retail investor and want to know whether he's in or not. i watch the weekly fund flows. so far i see very modest interest by the retail investors even as we're hitting new highs in the stock market. i follow the lipper numbers every month. jim, you know there's been outflows for years. retail investors every week taking money out. so far in 2012 there actually has been modest inflows. i've been a little bit encouraged by the numbers that we have been seeing so far. but when you take out exchange traded funds from these numbers, still inflows, but, jim, it's very, very modest. i take out etfs because still

largely they are the province of professional traders. jim, when i take those numbers out, i still see inflows of maybe $200 million, $300 million a week. >> bob, do you think there are individual investors getting a fair shake in the sense that all these firms have decided the person who has saved $100,000, a lot of money in america, they're not big enough. look, we have the incident with goldman. i know big firms like bank of americas, merrill lynches. they don't really want these clients anymore. is that hurting? you see them shunt these clients off because they're not elephants, so to speak. >> i don't think that's hurting so much as things like what happened with the goldman executive this week in that letter. that is so damaging to the -- to timmage that america is worth investing in. that wall street is not a bunch of crooks all out for themselves. that letter was so damaging this week. forget about goldman. we want people to believe in america. believe in investing in the united states. believe that there is a fair shake as you just said for the

investors. that it's not a casino or some other cliche somebody throws out. that's hard to change people's minds when you get things like that letter. i didn't like what happened there. >> no, i didn't either. >> even though goldman, of course, does not really deal with those people. high net worth individuals. but large institutions and corporations. >> you know they're going to use that letter time and again when somebody writes some editorial or something for "rolling stone" or something like that. you know what i'm talking about. >> you're right. i mean, you're going to keep using the word muppets. >> i'm feeling like oscar the grouch here. >> they now have a connotation. that's what that op-ed really accomplished. they added muppets to the lexicon of goldman sachs as well as vampires. >> yes, they did. it was wab tech upgraded. i misspoke by saying wabco. let's go to rick. shift to bonds and the dollar at the cme. go ahead, rick.

you got it. >> i'll tell you what, let's not debate why stocks are going up. you know, is it a smidge of the economy doing better? is it a smidge of the world economy doing better? easing? accommodation? it doesn't matter. something wonderful is going on in the big picture. look at the euro currency. the euro currency spiked. bob was talking about this. i don't know if foreign exchange is what you're supposed to watch. here's what you're supposed to watch. we saw our 10-year break out of the range. you could see it. highest yields going back to last fall. but we didn't see the same overseas. but we are today and part of yesterday. look at the bund. it's popping out of its range that was four months in duration from november. the gilt. it was, what, a couple weeks ago it was 2% and lower. now it's approaching 2.50. if you're hooking in some of those fixed income markets to the upside, and their equities are moving to the upside, right now the boss of this show is the

equity movement. in my opinion, that's paying attention to the fixed income boys selling their positions. back to you, jim. >> rick's keeping the right thing in front of us. remember, i think rates rising, we'll talk about that later with kelly evans because there's a dispute. latest moves in energies and metals. >> jim, yesterday chaotic day with headlines coming out in europe about a potential agreement on an spr. the white house batting down the headlines. we are back to the levels we were before all of that turmoil, extending some gains after that core cpi was tamed. energy is certainly the thing that people are watching, particularly gasoline prices. its impact on consumers. we'll see what impact that will have with the michigan numbers later on this morning. but 6% up in february. the biggest increase for gasoline prices since december of 2010. and we saw a 30-cent increase in terms of retail prices at the pump. that's something that is going to continue to be a talker. in terms of metals, copper is

the outliar this morning. guys out here in the pit tell me we've seen technically bullish signs one being the golden cross. they are bullish copper. >> bullish copper. >> the golden cross. >> i've been watching the jjc. the copper etf. i've been saying it's teetering. we have chinese inventories spiking. i always take china as more important. remember, 10% of the world's copper was used by china ten years ago. now it's 40%. we used to be 30% ten years ago. now we're 10%. i think the price of copper is set in china, not in london. >> absolutely. that's part of the story. it's set in china. we've been talking a lot about what's happening with chinese demand trends and how they're slowing. >> what does that do for rates worldwide? >> jim, why are you convinced that rates are headed straight up? >> well, other than the fact that geithner is trying to get

out of dodge before these skyrocket -- >> by the way, they have been, in part because perhaps they have been the 10-year. we can take a look at the last month. we have moved up significantly in yield as you see right there. >> i think there's two forces going on here. obviously we're going to have more supply. that's going to happen. i think it's demand. i see the mortgage market coming back. i do think there's a subtle trend toward, look, i've got to get my mortgage before rates start going up. bernanke gives you that window. the 3.5 rate i locked in last week i think will stand like when my dad got back from world war ii with the gi bill loan. >> that is a low rate. >> this move in bonds in the last week, a lot of people are looking at this and saying this is it. this is the big turn. >> yes. >> you don't think that's a little bit -- that's reason to be cautious that everyone's kind of looking at this and saying this is it? >> no. i think you're absolutely right. i don't know whether i have a devil's advocate position or you do. everybody's who's been saying

rates are going to go up has been wrong. >> let me put it this way. we have a situation -- until we get to the point where the economy is closer to its, say, prerecession potential, look at the gap between nominal gdp -- for the scout sumners of the world out there, yeah, we're adding more jobs. there's more of a pulse in the economy. i don't think we're anywhere near the point where we're going to now see the end or big reversal in the trends that have been driving this. >> your argument would be we stay here or go back down to the 2% range or below. >> i don't think it's out of the question that we retest the lows we've already seen. it implies the economy has something like a double dip scare, slowdown scare. i think we're having a speed up scare now. it could easily go the other day. we have to see what happens once we get through some of the seasonal pattern. >> the industrial production number this morning, does that p buttress your case? >> it would buttress anyone's case. pretty strong. manufacturing number strong. capacity utilization is gradually bumping up. you'll get other people saying where's the big recovery?

is this strong enough to be sustain snabl sustainable? >> feels like we've been saying that for a while. >> it's fair to point out reasons why you want to be a little bit skeptical here. >> remember, you know, we -- you taught me this. the credit markets are what moves the equity markets. >> credit tells you the story. all right. we're going to take a break. forget the ipad, iphone and ipod. if apple created a beer, what would the company call it and what would make it special? tweet us @cnbcsquawkst. your answers coming up. as we head to break this morning, let's take a look at some of the early movers. [ artis brown ] america is facing some tough challenges right now.

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i'm going to ireland first week of may. i'm going to have a better answer than these people are going to have. >> these are good. take a listen. we've got answers to our squawk on the tweet. apple's new ipad going on sale in stores this morning. we've been asking on st. patrick's day, coming a day away, if apple created a beer what would the company call it? and what would make it special? derek tweets, icidec. 2048 times 1536 apples per point. if apple made beer, it would be st. siri girl. looking better and better with each round. >> she lives to serve. >> i hops. your bottle in the fridge doubles in size overnight. >> daniel, ilager. costs $10 a bite. you're not just buying a beer. you're buying into a community of design conscious alcoholics. >> those are good.

>> they are very good. it's incredible you point out when people tweet us, it is rather amazing. because people watch the show. they're very much into this. i originally was skeptical about the -- i didn't think you could say a good question and come up with good answers. i wantgratulate everybody. >> i enjoy reading them as well. the trading day, it's still young. there's a lot more "squawk on the street" ahead. coming up, before you start kicking off your friday trades, take a listen to what cramer says. don't worry, it'll only take one minute. six stocks in 60 seconds. "squawk on the street" will be right back. you where we go.hows but not how we get there. because in this business, there are no straight lines. only the twists and turns of an unpredictable industry. so the eighty-thousand employees at delta...

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all right. time for six in 60. six stocks, 60 seconds. let's start off with priceline. >> this is really hotels.com. an incredible worldwide business model.

i continue the like it. stock goes higher. >> cabela's. >> stock got hit badly. firearms up. business up. i like the stock. >> transocean. >> a lot of people upgrading. i prefer ensco. technology revolution. they're using older technology. i want to sell. >> pretty big move today. >> it has. big secondary down here. >> yep. buffalo wild wings downgraded. >> this is heresy. we are in march madness. a lot of people say sell march madness. i'm still a buyer. >> chipotle. price target increase at piper jaffray, 4.25. >> they're saying this is because of london expansion. there are only two in london. >> red hat. >> rbc says billings are good. morgan stanley has last word. red hat down badly today. >> in terms of the s&p.

>> what can i tell you? >> you did it all. you always do it in about 60 seconds. unbelievable. >> it's kind of theme. six in 60. >> i picked up on that. >> i got to tell you, david, there's a lot of cross-currents in the brokers here. deutsche bank downgraded morgan stanley today. i thought this was significant. >> let's go to rick santelli. get consumer sentiment. we'll come back and talk more about the brokers. >> we are waiting for the preliminary march reit. 74.3. this is a disappointment. you know, we were looking at some of the best levels in a year. we're expecting that to even climb higher at 76. this a miss at 74.3. this takes us back only a couple of months. january was 75. if you look at december it was 69.9. as i said it's a preliminary number. it's not the final. i'm comping it to all the finals. this one's a bit of a miss. equities according to my guys

trading around me started to give up a little bit of ground a few minutes ago. we want to really monitor that. back to you, david. >> all right, rick. >> can we get a number this morning that makes you feel -- >> between the industrial production and then the -- >> i'm not seeing -- >> i don't know. >> i keep thinking about your opening comment about a ceo at a fortune 50 company. not saying it's boilerplate when they say, listen, we're not sure about the future. that there are undercurrents that maybe i'm not -- i know kelly feels the same way. kelly was talking about bonds. >> i find those conversations -- they're always anecdotal. ceos are typically cautious by nature. these are not conversations i'm having on air. these are people i've known for many years. i'm not getting there when i'm looking for a little more exuberance. nobody's saying things are terrible, we're running for the hills. >> david, m & a is really predicated upon confidence. >> it is. no doubt. that is the key. >> how is it going other than

canadian deals? >> this is going to go down as one of the worst quarters. it's interesting. a lot of people thought, all right, we had the turmoil in europe. that put a lot of things to the side. we came into this year, europe, at least we seemed to put off the potential of financial calamity over there. there's hope that in the second half of this year, even in the second quarter, we'll start to see a real pick-up. lately i've been hearing some deals sort of not quite getting there even still. it goes back to confidence, to your point. >> look, i always want to check my enthusiasm. seven straight dow days up. not since 2010. s&p keeps breaking out. but, you know, if you're going to keep rising like this, you need better and better and better data. not getting it. >> right. all right. coming up, we're going to double your pleasure. cramer's sticking around it says here for another hour. that's wrong. two hours. >> i'm for the duration, my friend. >> i said to him this morning, will you stick around for the 11:00 to 12:00? he said yes. also ahead, profiting from the iconomy. tech players besides apple that

will benefit most from the new ipad. stick around. a lot more "squawk on the street." ng. ♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪ ♪ when your chain of supply goes from here to shanghai, that's logistics. ♪ ♪ chips from here, boards from there track it all through the air, that's logistics. ♪ ♪ clearing customs like that hurry up no time flat that's logistics. ♪ ♪ all new technology ups brings to me, that's logistics. ♪

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all right. we've got cramer around for another full two hours here today on "squawk on the street." me, too. kind of a rarity to have both of us. >> i made it through the first round. i can go through the second. i can go deep here. >> i want you to go deep. i need you to. let's get to the road map for the next hour, the 10:00 to 11:00 hour of "squawk on the street." apple dominating the headlines this morning as the ipad hits shelves across the nation. but it's not just -- it's calmed the called the ipad. not just apple getting the boost on this frenzy. we've got the trade on the apple eco system. we'll talk about that in just a moment. the same $100 plus price tag on a barrel of crude driving up the price of jet fuel, prompting airlines to raise ticket prices across their systems. that's twice since the start of the year. so will travelers see any relief? we're going straight to the source. we'll have the ceo of spirit airlines. and we are talking beer and debauche

debauchery. st. patty's day revelers gearing up for the festivities. we're going to speak to the chairman of boston beer as he gets ready for his company's holiday push. of course, they make sam adams. >> does mcdonald's still do that shamrock shake? that's what i want to know. >> i don't know. i don't go to mcdonald's. >> back when i was 210 pounds -- >> you weighed 210 pounds? >> you haven't done a diet book yet? you're missing a huge opportunity. >> i lost four inches. i lost 40 pounds. take it where you can get it. >> sprint announcing it will drop its planned 15-year 4g network partnership with would be hybrid network operator lightsquared. remember, lightsquared controlled by phil falcone. this was announced last july. planning to host lightsquared --

lightsquared, of course, seemed to be in very difficult trouble since they say you cannot operate. you're encroaching on -- >> that's a problem. >> did anything go right for falcon falco falcone? >> in 2008. for his bank account for some time. >> that's the hedge fund business. what have you done for me lately. >> bought some nice real estate. >> good. i'm not going to feel bad for him. >> i don't think you should feel bad for him. people in his hedge funds who were locked up in largely an illiquid investment, you don't know what the future is for lightsquared. many anticipate it'll have to go into some sort of restructuring at this point. >> big story. >> exxon mobil looking to sell its stake in hong kong's castle peak power. currently the owner of three hong kong power plants. >> i keep waiting for exxon to

endorse natural gas as a surface fuel for trucks. remember, 25% of all imported oil is used to be able to make diesel fuel for trucks. exxon has very specifically been against that. >> why? they don't want to cannibalize their other -- >> that's my interpretation. they said, listen, it's not practical. one of the reasons it's not practical, there aren't enough gas stations. who has enough gas stations? exxon. >> if they made that decision, that would be a seminole change. >> is it up to the exxons of the world? you've talked about how the government needs to do more to encourage this. you're a free market guy. do you want the government picking winners and losers? >> i do favor subsidy that would be paid back. it's clean energy fuels that came on my show. that's andrew littlefair, my show, "mad money." and said exxon's not in favor of

this. exxon paid the top dollar for xto. we talk about countrywide being a bad deal. when you pay $9 for nat gas and we're seeing these prices, obviously i think you should be using it for more than just utilities. but not exxon. they don't think that. >> yeah. >> let's watch that story. >> yeah. we're going to keep an eye on that. all right. ups reiterating its plan to make an offer for tnt express. the transport saying it intends to file for approval of its bid documents to dutch market regulator afm by may 11th. tnt previously rebuffed ups's earlier offer. i'm not up on my dutch -- >> ups, people like -- remember, yesterday, fedex was up. ups. mentioned transports. they had a break out. a lot of people were shorting the market because they felt that transports not going to break out. yesterday i think was a very important day. watch union pacific. because they are the best run rail. and stock is higher again today after a big move. >> all right. >> okay.

apple aficionados lining up for hours outside the company's flag ship store. i know i won't be able to get in the store because of this. to be among the first to get their hands on the newest ipad. one woman even sold her place in line for $1,000. i'm trying to get tickets for "hunger games" on ebay. apple isn't the only company cashing in. we're taking a look at the other tech companies that could also see a big pop. i got to tell you, stephanie link who works with me every day. director of research and vice president of strategy now at the street. also the research director for -- my travel trust. i don't think anyone has without smashing an ipad in half and seeing what fell out knows as much about you what's in it. >> thank you. first and foremost i think a lot of what we were expecting. it kind of came to pass. there was a lot of speculation. these stocks are up quite a bit, right? >> important to point out. may not be the trade of a

lifetime now. >> that said, it's validation of these -- each company and their technologies. they're going to ride the wave. they're going the ride the wave of ipad unit growth. they're growing 40% this year. iphone growing 38% this year. i think over time you're going to see an increase in content per tablet and per phone. the margins go up for these companies. >> so qualcomm has been -- i know you and i have gone back and forth. i question whether qualcomm is better that broadcom. they're both in it. >> i think broadcom is better. it's cheaper, number one. i want also has a combo chip. they stick a lot of stuff on their chips. wi-fi and blue tooth. they've been in the ipad, all of the versions. they continue to gain share in apple against their competitors. they have a 70% market share in their chip business. >> what's the valuation for some of these companies? you mentioned this isn't necessarily a new story. >> the reason why i like this over qualcomm, it's trading at 12 times earnings. historical range is 11 to 21.

in the peak it was up 41. that was the bubble. i think this company is going to grow solid double digit growth this year, next year. margins can improve as they continue to expand not only in apple, but also elsewhere. >> you mentioned that some people were not -- some companies were not -- who has increased or been knocked out before that is suddenly back in the good graces of apple. >> skywork solutions. everybody was panicked because they were kicked out of the iphone 4, right? they got back in the 4s. we were all wondering what is their presence going to be in the ipad? they got in and actually there's speculation there's a little bit more in there. we're still kind of digging through the nuts. >> what does skyworks bring to the party? >> their power amp. you have more data. you need more power. more power amplification. these guys win. there's also speculation now that they get into the iphone 5 in the 4g. 4g is very, very important. they were already in the 3g products. did they have enough technology to get into --

>> what people saying about the iphone 5 at this point? >> second half of this year. >> that's going to be a 4g. >> absolutely. >> what about samsung? they're helping with the screen. they're also a competitor on the tablet front. >> they all kind of compete. toshiba does as well. the retina display. everybody's talking about the retina and how great it is. they are the manufacturer. they win certainly as well. by the way, you can get -- you can kind of play on samsung through broadcom because that's one of their largest customers. >> i want to talk about cirrus logic. i know you and i have gone back and forth on this. clearly the best company for sound. what happens when apple is your biggest client? >> that's the reason why i would sell into strain. this is the one i would sell. that's a little controversial. again, it's 53% of their revenues is apple. that's big. it's growing to probably 70%, 80% by the end of this year. to me, that's just too much risk. i'd rather own some of these others. skyworks is very volatile. a lot of high beta on that. a little qualcomm, that's a

little more defensive, relative. you have the broadcom. >> was there anyone not on the list? any surprises? >> i didn't see om omnivision y. they do the cameras. that doesn't mean they're not in it. we haven't seen it. >> for any of the group that we're discussing here aside from as you just said cirrus logic? >> i think out of all the lists, avago is a pretty big customer. i think that, you know, avago, by the way, is doing really well not only in smartphones but also in cloud. that one actually i think they win quite a bit. >> private equity. >> then go back to skyworks. 20% of their revenues. you have, like, a lot of different exposures. but i like the diversification. >> texas instruments in this. but also levered to some other

players. >> they have 96% of their revenues in semiconductors. we like that. they're in a lot of areas. but then they're in the -- they got into the ipad with the touch screen. that's good. it's not going to move the needle, though. i don't think. >> weren't they cautious on their outlook recently? >> they're always cautious. >> semis. incredibly cyclic cal. but for someone with this much exposure to apple. >> it's about 3% of their exposure. overall expectations are very low for ti. the reason you own ti is not really for apple. it's for national semiconductor. they're acquiring national semi. that's where you're going to see the big margin boost. what you want to do in se semiconductors is really see the margins expand. through products or integration and acquisitionings. >> cirrus logic so levered. cypress semi. this kindle is not doing that well. >> it's not. at least not the first version.

stay tuned. because broadcom, there's speculation broadcom is going to provide the combo chip in the fire for the next version. i don't think it's going to really take a lot of share. it could be competitive. >> stephanie link who works with me at the street. >> patient woman. >> yes. oh, please! you haven't worked with me that long. you don't even know! you don't know how easy it is to work with me. i resent that. >> very easy. we're only one day away from the all important irish holiday, st. patrick's day. we're fwoing to speak exclusively with the chairman of boston beer company jim koch. get his day on tomorrow's big holiday push. how he hopes to stack up against the guinnesses of the world.

let's take a look at stocks to watch about 45 minutes into trading. ak steel forecast first quarter loss. company says it expects to see improvement in the second quarter. they always say they expect to see improvement and it's always a disappointment. maybe it trades up on a short squeeze.

pitney bowes. mean who are in there for that very big dividend, please be very careful. that could be the thing that goes. i don't like that deteriorating balance sheet. obviously the regular snail mail is in decline. leer upgraded to conviction by goldman sachs setting stronger demand for trucks. it must be coming back in order to make that call. with auto sales rebounding automakers are facing a question few could have fathomed just two years ago. is it time to build more plants? i can't believe this. i hope they do it in america and not mexico. phil lebeau joins us from chicago with that story. >> we're getting close to that point. that's a conversation i know executives in detroit in particular are having right now. at what point do they bring back more plants? it's all about capacity utilization. look at how things have changed. low point, january '09. 26%. february, 85%. any time you get over 80% you're at pretty much max capacity. that's why you have automakers,

in particular the big three, looking at new plants or assembly lines. some of this has people saying, wait a second? wasn't it just a couple years ago they shut down plants? yes. during the recession and the bankruptcies at gm and chrysler they closed 12 plants here in north america. that cut out about 5.5 million vehicles of capacity. they right sized to make money at sales of around 10 to $10.5 million. look what's happened to sales. it's at $10.4 million in '09. right now we're running well over $14 million. we're hearing people say we could see $14.7 million being the sales rate this year. you get that high you're going to need to add some capacity here in north america. that's why when you take a look at ford and gm, both of those stocks have started trending higher in the last three months. remember, capacity drives revenue which ultimately drives earnings. hyundai, there's so much speculation about whether hyundai builds a new plant, jim. we've been told time and again they are not in the mode of expanding to a new plant.

they're hoping to get another 10,000 or 15,000 units out of the two plants down in the south. if they can do that they think they can meet demand. at some point they will also have to expand. >> neither you nor i are political people. do you think when you hear there's going to be larger builds and maybe hiring that this cuts in favor of obama versus, say, the putative candidate, romney, who did not favor the bailout? >> absolutely. without a debt. that's why they're hitting it hard. yesterday obama hit it hard and the vice president at a speech in ohio hit it hard. they're going to be doing that all the way through november. >> phil, give us some perspective here. where were we on the highs in terms of sales in the '06, '05 period in there? >> close to $18 million here in north america. there were a few months it was over $20 million. those were isolated mornths. most are saying we're not going to get there any time soon. they are saying $15 million by 2013, 2014 is not a stretch.

>> no. 40% from 10. >> auto sales peaked, correct me if i'm wrong here, back in 2000 when we were talking something like $17 million. it wasn't right before the boom. this was the overarching trend in auto sales that replacement rates, that period's getting longer and longer. it's interesting. we're not just talking getting back to '06-'07 levels but really that 2000 year seems to be the high watermark. >> right. look what happened with a lot of those sales. people hung on to those vehicles for a long time. some of those vehicles are still with original owners. that's the pent up demand combined with a new economy or an improving economy. people are saying i've got to go in and buy now. >> is it the improving economy, phil? to what extent are high oil prices actually spurring demand for new yevehicles? relative to ten years ago the fuel economy here is double what i could have gotten. that's helping some of the automakers. >> i have a friend in the market for a new car. they said to me i cannot pass up the opportunity to buy a small car that gets over 40 miles per gallon. that's the change that's happened over the last four years. >> these ads on tv you see the

smaller and smaller cars. they're just really appealing to people. >> phil lebeau, as always, thank you very much. >> you bet. u.s. airlines having a tough time trying to raise fares in hopes of offsetting spiking fuel costs. talking about a rise inrice fuel. this is southwest air. earlier this week, remember it's expecting a first quarter loss. what's the read through? as roots disappear, fuel prices soar. we'll go straight to the source. ceo of spirit airlines, next. if you are one of the millions of men

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gets me going, that music. with the start of spring just around the corner, the travel season is heating up. so, too, is the cost of your airline ticket. fliers are having to dig deeper in their pockets due to soaring air fares thanks in part, of course, to rising oil prices. joining "squawk on the street" for an education collusive is ben baldanza. he's the president and ceo of spirit airlines. nice to have you here. what are you doing to offset rising fuel costs? >> well, thanks. it's great to be with you. you know, certainly energy costs are the highest costs for most airlines. they certainly are here at spirit. what we're doing at spirit is we fly a very young, fuel efficient seat. we also put more seats on our airline. just like apple gets a better picture when they put more pixels, we get lower prices when we put more seats on the plane. that makes it -- means that spirit's prices don't need to rise quite as much as our competitors when oil prices go up. certainly oil prices and jet fuel prices put a big strain on airline profits. >> right. of course, i guess a little less

leg room on my next spirit flight. what about charging everybody for everything that doesn't move? i was recently flying one of your competitors. to watch television i got charged. to buy anything i got charged. to basically get up and go to the bathroom i think i was getting charged or expected to. >> spirit will never charge for the bathroom. we do unbundle all of our product. actually, that becomes really important during higher fuel price times. because higher fuel prices mean higher airline ticket prices. and by unbundling more of the product it puts the pricing power in the consumer's hands. they can say, i'm willing to go without this feature on this trip and save a little money given that the prices are a little higher. so we think it's actually real consumer friendly to do that. and especially when ticket prices get high like they're get right now due to high energy costs. >> ben, i'm curious what this is doing to customer demand. there are some reports from competitors, from people in the industry, worried that we're not seeing as strong demand this year as last. partly because ticket prices are

up something like 4% year on year. what are you guys seeing? >> well, demand is still staying strong that we see. we have the lowest fares in the united states if you look at the dot statistics. i think having that low fare position ins laulates us a litt bit. you might see buydown. people who choose to spend a little more somewhere else. say i'll save money and fly spirit this time. our demand is still looking pretty strong right now. although we do expect pressure on ticket prices as -- as energy prices stay really high and volatile. >> to quote someone here, they said every time the price of oil rises by $1 it costs the airline industry $1.6 billion. how much does it cost your airline? >> well, you know, there's not quite as direct a relationship in that. because airlines -- airplanes don't burn crude oil. they burn jet fuel. jet fuel is a function of the crude oil price plus the refining cost. and we've seen times, for example, when the crude price drops, but the refining cost

expands. so it's really the jet fuel move you've got to track. not crude price. those tend to move in time together but not always directionally. it's when jet fuel goes up a penny it costs us about $1 million a year. >> unlike me here, but a little existential for a second. why does anyone ever get in the airline business? the cumulative money that has been in the airline business is all losses. what makes you think that -- that this time is a good time to be in the airline business? >> well, if you look at spirit's historical financials over the last six years, we've made money every year since 2007. and we made money in 2008 when oil was $147 a barrel. we made money in 2009 when there was an economic recession for travel. and, you know, being in the commodi commodity sector of the space like the dollar store for retail or maybe like mcdonald's in the restaurant business, we tend to be a little more insulated and do a little better with things. so if spirit tends to track a little differently than most of

the industry, because our model is a little more resilient to high fuel prices. >> are you earning your cost of capital? that's always been the question. >> absolutely. in fact, our pretax return on capital for 2011 was about 28%. >> all right. well, we'll leave it there. thank you, sir. appreciate it. >> thank you. >> i'll watch my knees next time i fly. it's going to be a tight fit, it sounds like. >> it does. it sounds like they're going to be putting more seats on. >> i don't find it consumer friendly to be charged for things. >> i don't either. >> of course not. >> i'd rather pay one price and not be nickelled and dimed. >> he has made money during that period. we've got to give him that. >> 28% return. you're not seeing that very often in the airline industry. >> give him his due. all eyes are on apple. joe kernen, if he was here, that always drives him insane. all eyes? really? >> they're all lower case is. >> some people used to say changing hands instead of trading hands. that would drive him insane also. a lot of eyes are on apple as the tech titan gets ready to

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one hour into trading. hear the stories we're squawking about. 7:30 on the west coast. 10:30 on wall street. university of michigan's consumer sentiment index falling for the first time since august.

mid march reading by a full point to 74.3. forecasts call for an increase to 76 even. kelly evans pointing out perhaps this is gasoline impacting the number. bank of america today's biggest gainer in the dow rising more than 1.5%. stock up 69% since the beginning of the year. move candidly that i mised. the whole bank group is on fire. speaking of blue chips, ibm hitting new all-time highs. surpassing $207 a share. using the 15 and 15. if you use their estimates of what they're hoping to get to, it's still an inexpensive stock even after this run. >> let's take a look at the broader markets for you right now and the internals. the dow, nasdaq, s&p all down ever so slightly. there's a look, of course, at the dow. really only, what, 700 or so points from the all-time highs we saw in the fall of '07. percentagewise, about 6.5%. remember, the dow is statistically irrelevant index. the s&p matters. >> always important because the dow has been stacked.

>> it's a price rated index. we have to point that out sometimes. >> they track together so closely. >> they do. not completely closely. one's 6% off the highs. the other is 10%. they're stuck. the dow people are stuck because this is the way they did it 100 years ago and they can't change it. >> it's interesting for an index from this old methodology that shouldn't make any sense it still relatively tracks with the s&p. >> it's also mentioned in my hedge fund letter, i always started wi eed with it. how i did versus the dow and the s&p. >> everybody measures themselves against the s&p. i missed the internals. we went by them. saves me having to do some math. there it is. i'm calling that 5 to 4. divided by three. like that? >> sleepy friday. >> there you go. decliners outpacing advancers there. but it's less than 2 to 1. 1.7 to 1. >> after this run? >> unchanged 180. as we're one hour in, let's head to chicago. let's get a bit more on the markets and latest moves we've

been seeing. todd colvin is at the cme group now. start off on the bond market here. what do you make of the move up in the yields this week? is it sustainable? >> i don't think it's sustainable over the short run. i think we're going to probably see yields creep back down. we did reach the 230 mark in the 10-year. with expectations for better growth here in the states, with the fed saying they may not use other easing policies, sure, there was sort of a little bit of a correction that we needed in 10-years. likewise we're seeing it in gold and stocks seem to be benefits from this all. ultimately i think we'll probably see going into the weekend yields start to creep lower. the problems in europe, the middle east and whatnot are still out there. we need to keep your eyes open. >> what do you make of lacker's comments? >> the fed says they're going to wait till 2014. he decides to come back in. he's always been a noted hawk. say we need to raise rates in 2013. i think he's just trying to bring some balance to the fed, to be honest. i don't think lacker really bereaves the economy is strong

enough now to even suggest rates are going to be raising in the next year or two. i think that he is just out there i think to keep balance to the fed. >> todd, how much has the rally in bonds over the last week or so really changed the meantalty going forward, changed from the trading ranges? >> in the equities did you say, melissa? >> sorry. it's kelly here. >> kelly. i'm sorry. >> in treasuries. >> you've got to look around at the big picture here. as long as the central banks around the world are going to be continuing to flood the market with dollars or euros or whatnot, treasuries are going to benefit. yields are going to continue to go down as sort of a risk off scenario takes place. what we're seeing in equities here, valuations i think are so cheap when you look at these pe ratios and some of these higher volume stocks, they're very attractive. i think volumes in the stocks, if they start to pick up and we continue to go higher then i think the treasury market is probably due for a correction -- >> any money going back into gold, todd? >> i think gold right now you've fwot a lot of longs in there that are probably taking a break. i think you've got a lot of

sovereigns in europe that are trying to bank some cash. >> yeah. >> i think this is a good bounce here for gold. it's a good buying opportunity especially if we get down near 1600. >> putting a tax on gold again. second time this year. i like gld. i like gold. i've got to tell you, i'm cautious if the indians are monster buyers of gold, you don't want them out of the market. you need them. >> todd colvin, r.j. o'brien, thank you. >> we have these oil stocks on fire today. varco. "mad money" recommended that last night. great technology story. oksy up. most levered to the price. comments from apache about the demand. energy markets one hour into the trading after yesterday's reports that the u.s. and britain would team up to release, perhaps, strategic reserves. that looked like much adieu about nothing. >> much adieu about nothing. one of the things trader wills point out is yesterday when we saw that immediate plunge, we kind of held technically. we went down to the lows twice and bounced right back up. which sort of sends a message that if they did actually move

towards an spr move, that it may not really do much in terms of prices. prices are right back to where they were before that. gasoline prices these days, of course, go off the brent price. we've got those moving higher as well. there's a lot of interesting data today in all of that inflation reading. when you look at the cpi, it is energy prices that are moving higher even as the core actually came in lighter than expected. then you look at the commentary coming out of the consumer -- michigan consumer sentiment report. we've had gasoline prices at the pump up 30 cents in the last 30 days or so. we're 30 cents away from the all-time high. that is fueling the feels like inflation barometer in the consumer sentiment measure. a lot of folks now think over the next year we'll see inflation up to 4%. that's up from 3% expectation last month. although the survey director says he thinks that $4 mark doesn't have the same shock value it did three years ago.

however, it certainly does feel like to people with this high price of gas that we do have more inflation. jim and dave, kelly, you know that feeds into the psychology of how people spend. >> yeah, definitely, bertha. look. this has been my biggest worry. this is the olive garden/red lobster worry that people will not spend, bertha. you know what? so far, so good. >> one of the things -- one of the interesting things is, you know, i've talked to a friend of mine. he said his february nat gas bill was $200 cheaper than it was last year. the warm weather this winter has helped be a bit of a tail wind for us. we'll see as we move towards the summer and we get headlines that we're at record prices if we do exceed that $4.11 a gallon, whether that's still going to be the case. >> right. of course, so much of that will come back to iran. all right. thanks so much, bertha. bertha coombs. with inflation on the front burner today, where do profit

margins fit in? that's a good question. glad we asked it. kelly evans is here. one seat away from me to give me the lowdown. >> i do think this is an interesting place to focus. i want jim's thoughts here after the data we've gotten the last couple of days. we got monthly reports on producer price indexes, consumer price indexes. what you saw was despite the run-up in energy costs the consumer core index is actually slowing a bit. going from annualized three-month gains of 2.2% in january todown to 1.9%. what does that tell you? it tells you if you're a company you're paying these higher costs, i think we can show a chart just kind of showing how ppi, producer price index, has been running hotter than cpi for quite some time now. if you're a company, how do you pass this along? it's one concern that people have expressed going forward about how stocks can continue to climb if we see pressure on profit margins going forward. again, consumer sentiment index suggesting that there's some bite here to these higher fuel prices. >> do you think that -- i see

these -- we need to put group price increase situations particularly in steel. we can't lose sight that our friend dan domico from newport saying chinese are killing our profits in some of these industries. should we be thinking about china when we see the inability to pass on prices? >> i think we need to think about the consumer. the fact that especially on the lower end we're not seeing real incomes rise as much as you might expect. there have been good signs. some good signs, especially at the end of last year, in terms of what's happening with income. even with the jobs report showing better gains, still seeing average hourly earnings up less than 2% year on year. i think the story as much as china is a factor is really more about the how the consumer can't necessarily afford these higher prices. >> okay. if that's the case and we back away from these employment benefits, if we get the belt tightening from the federal government, do we -- where's the income going to come from to continue to spend like the retail sales have been indicating? >> wage and salary income is where it's got to come from. again, if you want to sort of look past the sign for hopeful signs going forward, you focus

on that. say we're starting to see traction in the job market. that's great. the question, though, is whether these jobs are the same income levels that we've seen in the past. you know, if you look actually at average income for men, it's been stagnant, actually down since the '70s in real terms. >> staggering. >> this is a long running trend. it's one reason why you just want to be a little bit cautious about the brightening out look or about some of these green -- >> when you look at the big picture, yeah, it's still very hard to get overly positive. for example, your point about the average income for men moving down. which is why so many women are in the workforce as many would say in the not too distant future, it will pass a mark where women are more than men. >> the reason household income on average again in real terms has gone up at all is simply because women have gone into the work force. it's not because there have been gains beyond that. >> how about this hidden economy that we may have that we see in spain, we see in italy and greece? off the books. >> 50% youth unemployment. so much happening off the books.

>> it's just that when you talk to the labor secretary, i mean -- >> you've talked about it a number of times. it was a theme for a while. you kind of moved off of it for a little bit. >> because the economy got better. more people going back on the books. i think it's something to watch. i don't want an under grad economy in our country. not a political guy. that has never been a good sign for the strength of an economy. >> i want to mention the traditional places to watch when we're talking about a squeeze on profit margins or consumers not taking these price hikes is consumer discretionary, consumer staples. but you're still looking to see for that weakness really to bite. >> great points. great points. i got a tip for my enthusiasm of all time. >> thanks, kelly. pay attention, whiskey drinkers. you drink whiskey? >> scotch. i went to a new heights charity for athletes. really terrific. honoring a friend of mine. it was really flowing. i'm more johnny walker black, to be honest. >> pay attention, then.

last night at a charity event on liberty island a 55-year-old bottle of glen fittish scotch sebt a new world record for the most expensive bottle of whiskey ever purchased at auction. the hefty price tag, $94,000. that's more than $3,700 an ounce. >> holy cow. that's on overpay. by maistake i once opened a harlem and downed it in a couple of hours. >> straight from the bottle. >> i thought it was $5. let's tap that bottle one day and just drink it and see how we feel. that's a huge overpay for that. >> yeah. that's an overpay. i'm with you on that one. >> it's an investment. >> if you enjoy it and you've got the money -- >> there's no accounting for taste. come on. >> if there's another person to buy it at a higher price, that's the only reason someone's buying it at that. >> i do like -- no matter what we do we can give you a stock. >> i'm a dollar sign represented by a man.

>> all right. all this whiskey wheeling and dealing comes just one day before tomorrow's st. patrick's day celebrations. coming up next, we're going from scotch to where else? beer. taking the pulse of the beer industry with the chairman of boston beer, jim koch. that's right after the break. tdd# 1-800-345-2550 let's talk about fees. tdd# 1-800-345-2550 there are atm fees. tdd# 1-800-345-2550 account service fees. tdd# 1-800-345-2550 and the most dreaded fees of all, hidden fees. tdd# 1-800-345-2550 at charles schwab, you won't pay fees on top of fees. tdd# 1-800-345-2550 no monthly account service fees. tdd# 1-800-345-2550 no hidden fees. tdd# 1-800-345-2550 and we rebate every atm fee. tdd# 1-800-345-2550 so talk to chuck tdd# 1-800-345-2550 because when it comes to talking, there is no fee. 3q ♪ when your chain of supply goes from here to shanghai, that's logistics. ♪ ♪ chips from here, boards from there track it all through the air,

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and that any organizational employees who are unhappy at any given time. he's also told his operating committee not to circulate the op-ed or take advantage. i have to say how disingenuous these statements are. >> we had jamie dimon before that in a very short statement saying similar things. part of the undertone here is they think it could happen to us. don't take glee at a competitor's difficult time. morgan stanley competes fiercely with goldman sachs. believe me, anything they can do to steal a client away, they will do. as they should. that's what competition is. as they have for many, many years been competing. >> i was out with some brokers last night. i said, you know, look. what did i find most contemptible about this? by the way, bankers trust, very good piece today by floyd norrison mentioning that. >> to help bring down bankers trust. it is the disrespect of the client, whether it be the person who was arguing on behalf of a

client with $100,000 the other day who's just fighting to get service at a bank and was just refused, refused. listen, we can't help you. too small. too small. that and the contempt for the large customers. the german banks. this is what makes me seethe. the contempt for the little guy because they're not big enough to be served. and the contempt for the dumb money because they're too stupid. on the other side, brokers pushed back to me and say, hey, listen. if they don't have the knowledge, it's their own darn fault. >> they shouldn't be involved in doing difficult derivative trades ands complex derivative trades. >> it's interesting more people pointing at grown brothers harimon, the old model on wall street and talking about whether it's this change to being publicly traded that has spur add lot of this or whether it goes to something longer standing or it has anything at all to do with the model. >> it's certainly the rise of the trading culture in the case of goldman sachs. look at the composition of revenues 15 years ago and how much came from old advisory work. and how much comes from it now.

and the trading culture is different. blankfein talked about people being counterparties. you don't think about somebody on client bus positioning yourself in ways that aren't necessarily consistent with the client's best interest also. trading begets this kind of a culture. there is no doubt these companies becoming public changed to a certain extent their willingness to take risk as much as anything else which is what dodd frank is frying to address. >> and the commission structure. everything is down. these guys have to make a living. i'm not defending the rip-offs, but the core business is where they generate a lot of capital. it's not working. so they become hedge funds. >> it hasn't been profitable since the '80s. this is longer term and they looked for other sources of income. >> derivatives have often been that place. >> you can jam customers. >> there is a lack of transparency. >> trying to do something about that. >> we have to wrap.

at least here. then we're coming back after this. what we have straight ahead, apple's ipad hitting shelves today. this after the stock crossed the key 600 level yesterday. back below it today. what's next for the momentum trade that won't stop? we'll break down the numbers after this. rick santelli, what do you have for the next hour of "squawk on the street"? >> the biggest topic is a banking issue. what's the issue? are higher rates baked into the rate? we'll talk about the ingredients and see what we think about the treasury sell-off. all at the top of the hour. 3q we always hear about jobs leaving america.

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squawk patty's day continues as revellers get ready to paint the town green with their favorite beer. how much green will brewers make? st. patrick's day brings in about $245 million in beer sales. jim cook, founder of sam adams joins us. a first time cnbc interview. nice to have you. does it meaningfully pick up

sales around this time of year? >> oh, yeah. we notice it. st. patrick's day is a time when people tend to go out more. when they do, they tend to drink up. they will drink better beers like sam adams. it helps our sales. >> they drink better beer during st. patrick's day, not just more? >> yeah. we are past the days of green beer. people will go out, go to bars and pubs and when they are going out, they will tend to drink up. you know, they leave the cheap beer in the refrigerator at home. they go out and drink a sam adams or a better beer, mainly craft beers. this is a good holiday for us. >> jim cramer here. i want to talk about a particular phenomenon. i'm friends with brooklyn brew's robin ottoway and we talk about the stick it to the man selection at the bar. there is a commodity oriented beer i won't point out that you really want to rebel against and

the way is to order a sam adams. are you seeing it? >> yeah. in fact, we are seeing a significant transformation in the culture of beer, much like what happened with wine 30 years ago. you know, people used to drink jug wine. they didn't know much about the wine. robin's right. today, people are moving away from the mass produced beers. they are moving to beers with more flavor. they're kind of declaring their independence. like you said, what better way to declare independence than sam adams? >> jim, you are pricier than other guys. your gross margins fell from the 57 range to 56%. can you talk about -- we were looking at profit margins. are you going to have to raise prices more? >> probably not more. what happened is grain prices went up. sam adams is an all malt beer. we don't use adjuncts like corn,

rice or things like that. malt prices went up. as you said, sam adams is a little pricier. people are willing to pay for quality. when barley prices go up, we do have to raise our prices rather than reduce the quality. >> are you going to keep the gross margin where it is then for 2012? >> it bounces around. you see the ticker with gas prices, oil prices, things like that. those margins will bounce around depending on a lot of different things. what i focus on is really maintaining the flavor and taste of the beer. that's what people pay for. >> yes. watching those pictures got me thirsty. jim cook, thanks. >> cheers. >> all right. rub it in. >> i can play that game. mm! how sweet it is! >> i have a good job. >> you do. are you already drunk or getting drunk later? >> no, i'm a trained

professional. i can do this at work. broadcasting under the influence is okay for me. >> okay, got it. jim cook, thanks again. >> that's a closed track. i would not do it at home. >> tweet time. the irish and nonirish alike getting to raise glasses in celebration of tomorrow's st. patrick's day festivities. all this while apple looks to make lots of green, if you will, on the unveiling of the new ipad in stores today. that brings us to the squawk on the tweet question -- if apple created a beer, what would the company call it and what would make it special? tweet us your answers at cnbcsquak st. and the planes can seem the same so, it comes down to the people. because, bad weather the price of oil those are every airlines reality. and solutions won't come from 500 tons of metal and a paint job. they'll come from people. delta people. who made us one of the biggest airlines in the world. and then decided that wasn't enough.

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see what a raymond james advisor can do for you. monday on squawk box. >> news out that 80% of t.a.r.p. has been paid back. all right. taking a live look at the apple store in palo alto, california. it's about to open. you hear the cheers. 8:00 a.m. on the west coast. they have been lining up for a long time to get the ipad. remember, it is the third generation, but it's just called simply the ipad. all right. >> how are we doing today with apple? >> it's down a little bit. >> it reversed in a classic form that i really like to see when i'm long the stock. it digested a lot of stock. i was taking the pulse last

night with a group of traders. the vast majority shorted the stock playing the game of when a new product comes out you have to short the stock and dump it. that was not the case with the s-4. maybe this will be a similar -- 4s, of course. i like the stock. i think it goes higher. >> we have the third hour of "squawk on the street" starting now. >> announcer: welcome to hour three of "squawk on the street." here's what's happening so far. >> you would be paying taxes based on what you consume. basically people consume what they earn to a large extent. you would give american industry the opportunity to be more competitive worldwide because you're taking all the income taxes out of the price of the product. >> we believe that the demand for natural gas is going to pick up. we are already seeing it in terms of additional demand in the industrial area. i think you will see natural gas displacing more coal on the

generating side and see modest entry into the transportation segment. >> up .4 on headlines. cgi for february. that is in line with expectations. no revisions. >> the stock overruns the price target. it gives them another reason to come out. it seems like an amen chorus, but if you're using 550 and the stock is in your level what are you going to do? ignore it? you have to come out over the top. >> february industrial production unchanged. zero, goose egg on the month from january to february. this disappoints a bit. we expected .4. >> the opening bell on this friday, the day before st. patrick's day. hey, look, seeing a lot of green on the old board. >> there it is. >> higher fuel prices mean higher airline ticket prices. by unbundling the product it puts the power in the consumers' hands.

>> good morning. 93 minutes into the trading day. let's check out the markets. we have the dow, s&p and nasdaq in positive territory. a half hour ago they were negative. you can see the gains are quite slight as we end this trading week. we have seen very low volume although today we did start out with significant volume. >> we have expirations though. let's temper the enthusiasm. >> bank of america, by the way, keeps on climbing. look at that. up 3.5%. well eclipsing the $100 billion market cap. i can remember only a few months ago where its market cap was half that of j.p. morgan. j.p. morgan is back to $170 billion. befitting what you expect by the leaders in the banking industry. wells fargo, $178 million. bank of america had a huge move last week. >> this is important. the leadership group and the s&p. if you could transfer the leadership from the industrials and some larger defensives to this group you could have another leg in the market. i think that's exactly what's

happening which is a reason i remain bullish. >> it's only got 30 cent or so so to go. then it will double from the december levels. >> warren buffett who some say he's gotten too old. you can never get too old or too rich if you're warren buffett. >> that was august, wasn't it? or september. there is news in blue chip tech. ibm hitting new all-time record highs. intel rising to new 52-week highs. >> inexpensive stocks with big buyback ibm and great yield at intel. >> time for the road map. ipad fever spreading across the country. we'll go to the palo alto store. you saw them getting ready. it's a frenzy as they line up to buy the new ipad. then it's the biggest change in google's history. it will impact millions of people, things and companies looking to be found. we'll check the math behind the

algorithm adjustment. plus, we'll go inside the inflation deliberation at the fed and the grand crew of collateral. what the wealthy are now bringing to pawnshops when in need of quick cash. >> all right. let's get to the cme group. rick santelli, what's going on? >> this week, not only are ten-year rates up 30 basis points now as the crow flies but you have guilts up 30 points as well. you have the ten-year boon yields up 25 basis points. this is more than just what's going on in the u.s. why are world rates going up? is it baked into the cake permanently? let's look at the variables we should pay attention to. the ingredients of the rate cake. obviously in an election year there is so much the propensity to make that the number one issue. of course it is. there is growth. but it's more complicated. we have to assess qe which fuels

part of the growth. the difference between a sugar high or priming the pump versus sustained growth is different. that figures in prominently. whether you look at the bank of japan, the monetary policy committee, the bank of england, our fed or the ecb, you come up to a motion that generically and put bank of japan off to the side. we don't see another ltro on the calendar. our fed didn't talk much about the twist or future qe. the monetary policy committee at the bank of england, though they have a program in place, doesn't look like they will fire the bullets. that's impressive that equities can hold up at the multi-year levels while rates go up taking advantage of the notion. if we look at equities we have to look at the safety trade in treasuries. treasury yields were down because of insolvency and

europe. there is little doubt the combination of the ltro has put a band aid. we haven't talked about greece in 30 hours. that's a world record. you have the safety. let's not diminish normalization. whether you look at stocks in nuclear war of 2009 at 65, 6600 or ten-year rates intraday that traded 170 at one point. you have to inspect if growth isn't huge a normalization has to be rates moving higher. inflation, what did we learn from the university of michigan sentiment survey. whether you believe the preliminary read or not one of the metrics moved to 4%. this is a real wild card. i was amazed. now you can double short the treasuries, etfs. there are a lot. they have to track. are we creating a spiral? as rates move higher, speculators jump in. i have no problem with speculators. maybe etf activity contributed to some selling. those are the ingredients.

now it's up to traders to really put on how many tablespoons of each. once you get that down you will know the next big trade. back to you. >> that was awesome. i'm not kidding. >> you may want to check "equities" there. i think it was equites. >> the man's in a hurry. you're checking his spelling? >> from the beginning i worked with people in bonds. rick understands the components. you know rates can rise here, but you have to check off the whole list. that was just a great primer for those of us learning every day about the bond market. >> every day. >> apple's san jose store opened moments ago. the race is on to be among the first to acquire the device on the coast. john ford is in palo alto with more. how are the lines. >> reporter: in some way it is typical apple launch. just over 150 in line by my count. i counted 75 workers as well.

they opened up a few minutes ago. atypical in some ways. we have protesters from raging grannies shouting the blood of the workers is on your ipad, but they are older protesters. the line is young and diverse. in some ways the oddest disconnect between protesters and customers that i have seen. that i'm seeing is lines around the country are shorter than they were for the ipad 2. one reason is that preorders were in force for the third generation ipad in a way they weren't for the ipad 2. also, they opened early this time at 8:00 a.m. versus 5:00 p.m. last time. here's what they are in line for. the new ipad with the retina display. a picture of my oldest son there on the ipad. very high resolution. i talked to the first guy in line named chris. he had been here since wednesday night. he's getting the 4g with 16 gigs

of ram. >> wednesday night? oh, my god. all right. thank you jon fortt. for more on the apple feeding frenzy that's the new ipad let's bring in senior analyst from morgan keegan. how much of a deal should be made of this. analysts come out, doing line surveys comparing the lines for the ipads this time versus the ipad 2. there are not as many people in line so perhaps it won't sell through as much as we anticipate. >> hey, david. i don't know how correlated that is with ultimate sales in a given quarter. especially as apple becomes more of a main stream product and less of just the apple zealots buying them. a lot of preorders. a lot of sales will be folks that want an ipad but wait a month. this is the only consumer product company out there you see lines for at all. >> is the ipad as profitable as apple's previous devices?

>> as a product line, the ipad is less profitable. you know, it's another good price. from a stock price and a earnings growth perspective the iphone drives the engine here. so to a certain degree it's an appropriate day to focus on the ipad. in terms of how the year pans out it will be the iphone 5 launch and the upgrades that drive earnings growth this year and next. >> ta vis, a year ago we were worried about a glut of tablets. are you yet willing to say that the ipad is the ipod, meaning the only game in town and it's game, set, match and apple has won? >> i think relative to android, absolutely. the only company that has a chance in the tablet space to catch up is microsoft with windows 8. again they will be late to market. it's a tough battle. but microsoft has a lot of resources. if apple can get through 2013,

maintaining the share then certainly it's game, set, match. >> where are you in terms of the new ipad? how many will they sell? >> i don't focus on first weekend sales or first week sales. we've got about 13 million ipads for the quarter which is down a little bit from december, but less of a seasonal drop than they experienced last year. >> the numbers are staggering. thanks, tavis. up next, the dow is less than 900 points away from its all-time closing high in 2007. s&p, by the way, closed above 1400 yesterday. today we are rounding it up. we'll have a plan of action for you and your money. stick with "squawk on the street" from our home at post 9 at the nyse. ♪ [ male announcer ] the 2012 m-class continually monitors blind spots, scans the road to reveal potential threats, even helps awaken its driver if he begins to doze. so in the blink of an eye it will have performed

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all right. the s&p closing above 1400 yesterday. you can see we are almost five points above it today. by the way, the levels not seen since june of 2008. that's right. almost four years ago when the index closed at 1404. will this rally continue or is there a correction on the horizontal? the global chief investment strategy from blackrock group. the rally has been significant for the first three months of the year already. >> yep. i think the rally is for real. a few things happened that in my opinion justify the rally. you have seen a stabilization in the u.s. and much of the global

economy. europe is no longer the threat it was back in the fall. third, we started this rally with valuations very cheap. particularly cheap relative to bonds. i think the rally can continue. i would say it's been a smooth ride this year. i think while stocks move higher the move is accompanied by more volatility than we have seen during the first ten weeks of 2012. >> we have had virtually no volatility. only one triple digit move. i may be wrong. compared to last year, so little. unbelievable when it came to volatility. >> exactly. if you look where the vix is at 15, that's hard to justify in a world with a slow growth economy, lingering credit concerns. i don't think it skyrockets higher, but it should be trading at 20, not 15 now. >> russ, i want to go into the mind of the individual investor.

they were hurt by the flash crash. they get a bad shake because they are not rich enough to be a client at merrill-lynch or goldman sachs anymore. what are you doing to try to get people to know it isn't a rigged game against the clients? >> this is a huge issue. not just the feeling that the market's rigged but just the general trauma that retail investors had. think about people that got into the market in the 90s, went through the 2000 bear market. then the 2008 bear market. the flash crash. last summer's volatility and today you see enormous amounts of cash on the sidelines. part of the message to the retail investors is, one, stocks are reasonable relative to bonds. second, we still have inflation running at 3%. there may be times when it makes sense to move cash -- raise cash levels, but to keep large portions of your portfolio in cash in an environment when environments are 3%. over 10, 20 years you lose

purchasing power with that approach. >> quickly, russ, what's the biggest risk on the radar screen -- oil? >> you know, i think in the near term it's oil. longer term to me, the big risk is not 2012 but early 2013. the economy is recovering. it's a fragile recovery. next year we have fiscal drag. taxes are going up. spending is being cut. if the policies are implemented on schedule, i worry about the effect that will have on the u.s. economy. >> all right. thanks for joining us, russ. >> thank you. coming up, google changing a search engine to make it smarter, faster and more like asking a person for help finding something. we'll be right back.

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google is planning to refresh its web search formula. the company will provide relevant search results with semantic search technology. the change is the biggest in google history and could impact millions of sites that rely on google's page ranking results. for more we have dennis from the wall street journal. great to see you. is this in response to lots of companies gaining the google cue or wanting customers to have a better experience? >> probably both. people have been talking about it for years. one of the investors of the

world wide web said this means putting upc codes on every bit of data out on the web. if there is a file on jim cramer, for instance, we can move it, manipulate it, call up results that are much better. basically building a database around every bit of information on the web. it's data about data. >> we being google meaning is this -- one of the beauties of google in some ways was that everyone in the past who searched for something would see the same ten first results. it would almost tell you the hierarchy of the information or of the internet. does this mean everybody is going to see something different? >> over time it should make the results different. you will have a much smarter answer to kelly evans who lives in new york city and is involved in television. >> i don't know how i feel about that. >> it can get to that answer better than finding thousands of kelly evans around the world. some of this stuff is dense. scientists have been working on it for a long time as i mentioned. over time you will see better

results that actually get to the semantics. the actual meaning rather than just reading words. >> will this put more distance away from a company that's chronicled yahoo? doesn't this make yahoo a third fiddle? >> yes. semantic search has been talked about from a number of companies. here's the competitive issue -- facebook. facebook knows who you are, what you like, what you do, who your friends are. >> right. >> it's in way built a semantic web without the technology. it knows so much more about you. that's what google is trying to do with google plus and with some of these innovations. >> what about search optimization? there is so much of that. so much money deployed against figuring that out. does it need to change based on the algorithm? >> this will take a long time. but eventually if you have a product to sell, you will essentially create a upc code

for that product and that code can be used in so many more diverse ways than it can today. it's different than trying to load up the web page with relevant words you think will be in play. it's really about creating a database for the data. so, yes, if you're in business and you want to know how page ranks will change, you should know about semantic web. it will change the results. >> is it about facebook or siri? sounds like they are trying to do -- everybody has been favorably reviewing siri answering your inquiries. >> siri is doing well. it's not perfect. but the whole idea, google bought this company to basically buy its own index. they have 12 million different items. right? soccer players, countries, lakes, products. they have little data about each of those. now it's just trying to push those results out. as you mentioned, over android, over voice.

we could see it over the next year or so. >> i want to change direction while we've got you. you're an old m & a, mergers and acquisitions hand. we have been focused on goldman sachs. two report rs out with a story that goldman sachs considering strengthening internal rules including telling you when a banker owns stock in a company you're thinking of acquiring or your own company which you would think would be done now. this relates to a decision involving el paso and the sale to kindermorgan, the australian, the chancer having strong words. >> i love this story. i'm sure you have an opinion, too. basically if you're a banker you will tell everyone -- or a lot of people in the process what ownership you have in different companies. i think this is going to be a horrifying moment for boards and executives. they will find out how rich and how many interests their bankers have. it's amazing it wasn't disclosed

before. >> just to go back quickly, the el paso board wasn't aware one of the advisers owned $340,000 worth of stock in kindermorgan, the company they were buying. there were other conflicts as well. >> is it just stock? these guys do sophisticated trades. >> i would imagine a big fight in the banks about what's disclosable and not. >> this seems to be more of a response. it was the talk of tulane. all the m & a lawyers descend on new orleans every year. that was last week. the timing is interesting given the smith op-ed. >> it's related to the australian decision. it calls into question how difficult it is to be a banker. it's just not fun. not only do you have to go through so many committees, you have to disclose everything along the way. >> maybe it's about time. these people made too much money versus the rest of the people in the world. when i got to goldman, they were making more than we did. maybe this is just a wholesale

secular trend against making a lot of money at investment banks. >> definitely. >> we are seeing the wholesale secular trend in the profitability of investment banks. if you look at the profit margins at mar gan stanley, jpm, goldman sachs, these are not the businesses they used to be. these are not the jobs people want the way they did before. >> i went back to law school. where were the big lines? you would go and the first boston would have lines around the block for recruiting. the article today, it's no longer. >> when i see a banker go back to the law firm they came from, we know the trend is in place. >> it's going to happen. the prestige job is still hedge funds. >> it is. they make a lot of money. dennis, thank you. >> straight ahead, richmond fed president jeffrey lacker, the lone voice of dissent against interest rates and getting specific. we'll weigh the fed inflation challenge in a moment.

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here are stories we are watching at 11:32 eastern, 8:32 on the west coast. consumer sentiment dropping. economists expected a gain to 76.0. gasoline prices may be figuring in to consumer sentiment. u.p.s. is still in talks to buy

dutch-based tnt express. it plans to mount a formal bid by may 12. starbucks trading at an all-time high level dating back to its ipo. that was -- i'll give you a minute. got it? june of 1982. '92. right? got to be '92. sometimes it's far away, the eights and nines. i screw it up. so on this last day of trading for the week, there's bob pis i pisani. where you been? on the floor? >> you guys have been terrific. great conversation. just listens to you three go back and forth. even i was interested. have you noticed something has changed this week? things are different. there is a reallocation trade going on out of the bond market and into the stock market. it's been a great week for the stock market. let's put up the global markets and see what we have been doing so far. see if you can get a tight shot on this.

2.4%. even japan is up this week. germany is at the highest level since august. france at the highest level since august. only outlieoutlier is china. here's what everybody is talking about. how many times have you seen this? put up the second board here. it's been the move up in treasuries that's got everybody's attention. the u.s. ten-year yield is up 14%. good heavens. >> ooh! >> the dollar has been moving up but it's basically flat this week. gold is going down. the s&p is up. materials are up. this is a strange situation, my friends. bottom line here is something is happening. i know, jim and kate and a strong dollar and stocks moving up are strong for the market. stocks are unloved and the economy is showing such small signs of improving but it has

further to go. so where are you on the global growth scale? where are you standing on this? i'll show you. the parameters of where people are here. what side of gdp growth are you on in the u.s.? 2 to 3% or 1 to 2%. for china, above or below 8% and for europe, mild or deeper and longer recession? >> we have had the dollar strengthening on stronger u.s. data in tandem with strength instead of being a plight to save the trade. >> now it's strengthening on the idea the global economy is slowly improving. something has happened this week. there is a real mindset change. >> where's the pain on the 14% move down in prices on the bond market? there's got to be pain out there. some of the bigger bond houses.

>> the real pain is for people with long-term bond funds. >> this is a coiled spring that's ready to snap. what i don't want to see is a mad rush. suddenly we are at 3% on the ten-year in an afternoon. >> i don't know. >> i don't want to see it. >> rick santelli right here, right now to see what he's saying. >> where is the cake that bernanke is going to start sweating? is it two and a half, 3% on the ten? >> i don't know. my opinion is that ben bernanke is going to have to take his cue from the market. we'll talk, but i think there's two areas to watch in tens. 240 and around 2 and three-quarters. in terms of qe, the latter would definitely cause more qe, but if the market wants to forge ahead he has to be along for the ride. the market at some point will be bigger than the fed. >> i don't know. that's my read. >> rick, i have to tell you. i think those who are not paying

attention to the bond market move are missing this major reallocation, as bob said. also, we could have a big decline in bonds and it still wouldn't be competitive against the yields and stocks. you had all the different points earlier on today. >> i think ben should be happy. if he thinks he's given a signal that there is potentially less qe and stocks are still up even with the rate rise, maybe the primer is getting it to go. i don't know. i have a great guest today johnny seguin. he's from micrographs. he can answer all the questions. >> back in april at the end and then at the end of qe2 you can see the market moved away. this shows me where the volume was. >> let's simplify. this is all of qe 2 and the most prices traded, the highest volume price during qe2.

>> that was a 340 yield. >> let's move spo the current zone. show where we are now. >> is since after the qe, we have been coiling as rick's been mentioning for two, three months amp around 2%. we left it this week and i figure the pent-up energy will get us to at least a month's range which gets us about 250, somewhere in there. today we're about here which is 236. i think there is potential to get up somewhere around 280, 290 overall over the next quarter. >> further to the right is high volume and left is low volume. what happens, john, and ux explain this. is when you have little volume you fill it in. when you move away from long volume it's like a big dance floor. you get stability at this level to launch from. >> exactly. you will go into fill in the low volume zones. >> what i find fascinating is in a way we have tried to quantify the effects of the qe.

high volume prices for qe2 were around three and a half. the stability level post was around 2%. it's sort of you can argue that all of this has given us 150 basis points to try to quantify as we move up. what would be a failure? in other words, if this doesn't last the qe phase is needed. equities move down. rates move down. where would that failure be. >> if we got below the high volume zone. >> which is. >> 220. >> get below 220 in a week and the higher rates are over. john thinks two and a half is a big level and two and three-quarters. back to you. >> thanks, rick. we have a graphics department. they can work on charts. but that was quite a chart. >> something there. >> yeah. >> hey, kelly. i know you have another economic -- well, things to tell us about on inflation and the fed. >> we just want to mention we are getting reports in.

bank of america, merrill-lynch saying the market may have been too quick to price in the end -- or no more quantitative easing from the fed. we got inflation numbers saying the headline risk is there but that the core numbers were soft. again, looking into the end of the year if you price in fiscal tightening and we'll see if the economy can stand on its own. the risk potentially is we'll see the fed come back in. regardless of jeff lacker's promise this morning. >> you think risk is still to the fed? qe3? >> yeah. it's a scenario where you have to expect first the data rolls over and then people worry what's going to happen. then the fed starts to jawbone. do they do it at the april meeting before the expiration of the current program in june or wait for the softening and come back closer to the elections? tough call. >> all right. mortgage-free financing is not so hot. you wonder about operation

twist. that's the whole idea. >> i'm a bull. things are good in the economy. >> coming up, back together and better than ever. larry kudlow coming down to post 9 to join jim cramer and the rest of us here. stick around. we'll be right back. ] my boyfrii were going on vacation, so i used my citi thank you card to pick up some accessories. a new belt. some nylons. and what girl wouldn't need new shoes? we talked about getting a diamond. but with all the thank you points i've been earning... ♪ ...i flew us to the rock i really had in mind. ♪ [ male announcer ] the citi thank you card. earn points you can use for travel on any airline, with no blackout dates.

coming up on the halftime report, what's inside the new ipad? we're tearing it down and trading it. plus, weak guidance from steel makers. will warnings season knock down

the market rally? a big week for banks and a bad week for gold. our traders look ahead next up on the halftime report. now back to "squawk on the street." >> thanks, scott. america, get ready. larry kudlow and jim cramer together on set here at post 9. welcome. >> jim cramer, thanks for helping last night. >> of course. >> our friend harold hamm, the great father of the shale oil and gas drilling up in the dakotas, his message was north american energy independence is within sight if we take the cuffs off, let everybody drill where they need to, the environmental stuff is fine. he was optimistic about this. north american energy independence, no more reliance on opec. >> we are in a situation and north dakota will, i believe, pass alaska. we're talking about the tremendous finds. harold hamm of continental resources believes this is the

largest find since prudeau bay. i'm hung up on this because i see the company's well ahead of the government making the transition. one thing is certain. there is a backlash in washington against all fossil fuels because of leanings that aren't really able to be swayed. we are not swaying anyone on this who is anti-fossil fuel. >> it's a pity. i don't want to bash the president. but personally, the president is on the wrong side of the issue. he's basically anti-fossil fuel. we can do a lot more drilling for oil and gas. some people believe recoverable reserves for oil alone are 1.5 trillion barrels worth. imagine that. the idea that we are consuming 20% but we only produce 2% is simply no longer true. because of the harold hamms of the world it's almost

exponential the kind of growth. it's a job creator and eventually they will get it into the cars. it's already the front page of the wall street journal. it's already down sized the cost of homes and businesses, natural gas. >> are they preventing drilling? do you hear there is a lot less drilling going on that might be accomplished otherwise? >> 90% of oil and gas is on nonfederal lands. great american companies embraced hall burton and others. what you're seeing is inventive. harold hamm took the oil rig down two miles and two miles flat either way is where the oil is. the only big problem here, just so you know, is we have so much of it and we don't have the infrastructure to bring it out. this oil isn't -- >> it's a pipeline infrastructure. >> keystone. >> which would -- i know. keystone is so important to

this. there is more oil in the oklahoma depot and they can't get it to the gulf coast for refining. that's a pity. energy is really helping production and the production of business equipment. energy which is growing as a sector and the numbers out today. i know the top line production number was flat. inside that, manufacturing growing at 12% last three months. business equipment, 17% last three months. those are very strong numbers. >> interesting, too. it comes after the expiration of the tax credit for depreciation. >> which has gone from 100% to 50%. >> right. >> these guys are still plugging away. this economy has gone from 2% growth to 3% growth. >> you believe that? >> i do. >> talk to me about the manufacturing number. we start to hear about rising wages in china, for example. people bringing jobs back. it's hard to understand how large that may be. what's behind it?

>> rising wages in china are a good thing. businesses are putting profits and cash flow to work. i don't see there is a boom. it's not my point. but the attitudes are better. the profit opportunities are there. people are investing. these companies have plenty of cash. we know it. that's why long-term rates are going up. they will still go up. two to three percent in this kind of economy and gold prices should go down because people can invest in the stock market. >> 3% gdp and tenure is what you're calling for. >> that's a kudlow call. that's the way i see it. >> we have a cramer call similar. >> lawrence and i often agree in the exhibition of the moment. i'm glad nothing has changed. >> you know what's good, jimmy? i want to bring in the stress test. the stress test, yes. banks are healthier. that means people don't have to invest in risk free treasuries

or gold. this is a very -- >> things are healthier post stress test than pre? >> things are relatively healthy. >> compared to 2009. >> they are. >> compared to the last stress test in 2009 where nobody believed anything, capital is plentiful, liquidity is plentiful. that's why you are seeing inflection in gold. why not invest in the stock market which is a pro growth trade? i think the stress test has a role in that calculation. >> it's a reason to remember when people talk about what will drive gold higher and inflation, not necessarily. it's the opposite. when the outlook darkens, people expect easing from banks and it pushes gold up. it's okay to pull back because the opportunity cost is greater. >> they can't find gold. 1% increase in the supply of gold despite the doubling of the price of gold, 1% increase only in the amount of supply found, gold is also, like oil, in

places we can't get it out of in a lot of cases. the supply side certainly different. we have to keep track of both sides. supply and demand. >> i wouldn't close the curtain on inflation forever. i will say that. looks to me like it's 2.5% now. there is a lot of excess money in our banking system and our economy. at some point down the road, the fed's got to take that out and normalize interest rates. that won't be easy. but right now short term, that's not my problem. i don't believe it. >> larry, thank you very much. >> thanks for having me. >> when some of the 1% needs quick cash they have been known to frequent pawnshops but what they are posting as collateral now could be the ultimate in liquid assets. jane wells has more. hi, jane. >> reporter: just because you're rich doesn't mean you don't need cash. going to the bank may be too hard, take too long or maybe the ex-wife took all the jewelry.

include your liquidity trading on liquid assets. >> even the affluent often have bath bad credit. we do not perform credit checks. the collateral speaks for itself. >> reporter: jordan todayback bank is the third generation of a high end pawnshop ironically above bank of america in the heart of beverly hills. it's a ten carat stone drive away from rodeo drive. they are expanding what it will accept as collateral to include fine wines stored off side where they value the wine before lending a dime. >> our most recent loan against wine was three cases of 2005 chateau lafite rothschild for $10,000. it is stored in a temperature-controlled storage facility off site. >> reporter: how much is it worth? >> about $75,000.

they asked for $25,000. we were able to meet that need. wines are multiples just like picasso prints. we see what they have sold for in the past in international auctions. in addition we look at spectator, enthusiasts, parkers and see how the wine is rated. the loan was made approximately two months ago. it will come due in approximately two months. i have absolutely no doubt that my client will pick it up. >> reporter: wouldn't you rather maybe the client didn't pick that up? at least maybe leave you one bottle? >> i wouldn't mind tasting a bottle. however, the wine belongs to my client. that's where it's going to be. >> 2005 was a very good year. 95% of the goods pawned at his shop are redeemed by owners. he has an oscar as collateral currently. more on that on on the closing bell. loans under california law are

four months but can be rolled over if you pay the interest. david? >> i'm looking forward to hearing about those oscars that are pawned. jane wells, thank you. >> that's so sad. you know, like someone pawning their heisman. >> or gold me a maine dadals fr olympics. >> i have never pawned anything. >> just for the experience. i have visited. >> keep those tweets coming. in honor of st. patrick's day and the launch of the new ipad in stores we are asking if apple created a beer what would the company call it and what would make it special? tweet us. we have your answers coming up. you know, those farmers, those foragers, those fishermen... for me, it's really about building this extraordinary community. american express is passionate about the same thing. they're one of those partners that i would really rely on whether it's finding new customers,

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...night view... and heads-up display. [ engine revving ] the all-new 2013 lexus gs. there's no going back. let's get to it. time for squawk on the tweet. you have apple's new ipad in stores today and st. patrick's day celebrations one day away. if apple created a beer what would the company call it and what would make it special? andrew tweets the ihammered. you try one and then before long you're outside at the bar at 4:00 a.m. in the morning waiting to buy another. linda says ibrew and it would

give people apps to customize the mix, alcohol content and flavor. steven says, i have been making my home made beer for years and it's called ibrew. always creative. thank you all. >> apple, don't go after him. >> yeah, right. god, that would be -- if they do we'll make them pay. take away time. rick santelli and art are here. nice hat. >> thank you. i'm in early rehearsal. >> tomorrow do you stay vertical at all? >> well, tomorrow is, in fact, a bit of an amateur day. those of us who do it 365 days a year are careful to watch out for that. >> that's what they say about new year's eve for real partiers. what do you make of the action? quadruple. buy-in is low as you might anticipate but we have had a strong stock market.

>> this is moderate volume for an expiration day. quadruple anyway. we have had, i think four of the largest record volume days have been on quadruple. this is nowhere near it. i think everybody is looking to take a rest here. we haven't fully plaid out the potential black swan in china. the removal of mr. bowe. is he going to be a nonperson? he's thought of as robin hood by many there. we'll see if twitter come s alie in china or if we move on to safer things. >> one thing i have been focused on is the turn off by the little guy. you have represented the interest of the little guy. i keep hearing the same thing over and over again. if you have $100,000, you're not rich enough to get a call from a person. that person won't help you, help pick the stock. how did that happen? >> what has happened is people began to get involved in products and they got away from

the handholding. you know? the client deserves to be able to call you when things aren't right. >> yes. >> if you look at last year, if you ever needed hand holding that was a year for hand holding. i heard reports of clients calling people up saying, tell me again, that's a business you're in? is that really a business? they have been so badly turned off and running away from not just the market but the mutual funds also. there is a bad scar there. we hope they get over it. maybe with the trading we have seen here it might induce people to put a toe in the water. >> is there -- >> rick in chicago. quite a week for the bond market. 14% move in yields. will that continue or is this a week to look at as an aberration? >> rates were meant to move higher and they have. they will stay above the great chart we saw with the high volume around 2%. i don'